Most of the [$1 trillion] pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. If pension funds had earned returns just equal to the interest rate on 30-year Treasury bonds in the three years since 2007, their assets would be more than $850 billion greater than they are today. This is by far the major cause of pension funding shortfalls. While there are certainly cases of pensions that had been underfunded even before the market plunge, prior years of under-funding is not the main reason that pensions face difficulties now. Another $80 billion of the shortfall is the result of the fact that states have cutback their contributions as a result of the downturn.

Leaving $70 billion to make up nationwide, in addition to the $80 billion in deferred contributions.

Why would conservatives get their undies in a twist about this? It's what they do. More to the point, though, they're opposed to all domestic expenditures with the possible exception of law enforcement. They don't care if their public rationale to cut spending on people is a lie, only that it works.

But the most important reason is probably the plutocratic one:

[I]f pension funds stop investing in equities, as some have advocated, this would imply higher taxes and/or lower benefits for public employees. It would also mean that other investors could expect to see higher future returns on their stock holdings.

Without the pension funds chasing high rates of return in equities markets, Republican fat cats' capital will be scarcer, thus more valuable and due higher returns. There is no better outcome for GOP politicos than to sucker a Democratic constituency at the same time it succors a Republican constituency.

(Massachusetts, truth be told, is not very good on pension funding. Our unfunded liability is larger than it should be. Not a crisis, as GOP Chicken Littles would have you believe, but a debt that should be handled responsibly.)